Social Enterprise: Balancing the Sinner and the Saint

Guest post from social enterprise expert Tim West. Part of The
NextWomen Social
Entrepreneurship Theme.

Do you have to be ruthless to be a good
business person? And just what do we mean by ‘good business’ anyway?

When the Nobel Prizewinning economist
Muhammad Yunus came to London from Bangladesh to address a group of 30 of the
UK’s most promising social entrepreneurs, he made the powerful case that
economics – or the traditional way that we view it across the world – is broken.

The problem, he told the group of ‘Deloitte
Social Innovation Pioneers’, was that economics and the world of business had
been built on an assumption that making profit was more important than making
people happy. Just as problematic was the fact that, in the world of ‘charity’,
the notion of ‘profit’ was considered a dirty word.

We exist in an economic system where doing
good and doing business are apparently polar opposites.

Yet, if you were to
explore the motivations of any rational human being, it is pretty obvious that
very few of us, apart from the odd saint or psychotic dictator, make our
decisions about life in this way. We are, points out Yunus, a natural mixture
of the selfish and the selfless. That means that, in general, we all want to
make some money, afford a nice house, take our loved ones on some fantastic
holidays, and indulge in some high-level gastronomy or designer clothing. But
we also want to act fairly, support our communities, help others who are less
fortunate than ourselves and save our bit of the planet.

So the question is: if we are this natural
blend of saint and sinner as human beings and in our personal lives, why should
we be any different in the world of work – whether we work in business or
charity?

The answer, of course, is that we
shouldn’t. What’s more, when we challenge this paradigm of business versus
charity, things can get pretty exciting. We find ourselves unbuttoning our
business suits of profit maximisation and throwing off our stifling cloaks of
charitable purity – and proudly slipping on the Jimmy Choo shoes of social
innovation…

Before I get too carried away, let me
explain the idea of ‘social innovation’, and other terms such as ‘social
entrepreneurship’ and ‘social enterprise’. You don’t have to be a member of
some kind of strange cult – being ‘socially enterprising’ is pretty simple:
it’s about taking the best elements of business and entrepreneurship (great
ideas, excellent management, inspiring leadership, tightly controlled finances,
etc) and putting them to work for a social or environmental mission. Profit is
a good word in this world – you’ve got to make it or you will go under, and if
you sink then your mission is irrelevant. In fact, the more profit you make,
the more money you have to recycle into your business, which means you are more
capable of delivering your mission.

But social entrepreneurship is also quite
special. You’ve got to be quite a special person to create and lead a
successful social business. You must arguably be even sharper than the sharpest
conventional business leaders. You must find the best staff to work for you,
pay them market rates and inspire them to believe and deliver for the same
powerful blend of business and social aims that you have come to believe in.
You must decide where the balance between the profit and the social impact lies.

Lean too far one way and the business sinks; too much of the other and you
lose your soul.

So, who are these special people? Muhammad
Yunus himself is a pretty amazing example: the founder of Bangladesh’s Grameen
Bank, he believed that instead of giving charitable donations to the poor,
making small loans available at fair rates to some of the poorest communities –
in particular, to poor rural women – was the most effective way of helping
those communities take their first steps out of poverty. It began as a project
in 1976, lending a small amount of money to a small group of Bangladeshi people
in a village called Jobra, next to the University where Yunus was head of the
rural economics programme. As of October 2011, Grameen Bank had 8.349 million
borrowers, 97 percent of whom were women. With 2,565 branches, the bank
provides services in 81,379 villages, covering more than 97 percent of the
total villages in Bangladesh.

As
he stepped down from his position at the bank in 2011, after more than 30 years
in charge, Yunus wrote a letter to members about how it all started:

Thirty-five
years ago, I did not know that I would start a bank, and that I would lend to
poor people, especially to poor rural women. Like many other teachers, I was
busy teaching in the classroom, far from the realities on the ground. But Jobra
village took my future into a completely different direction. I saw, first
hand, how the loan sharks enslaved the villagers; I thought that if I were to
lend money to the poor, then the villagers could be free from the grasp of the
loan sharks. That is what I did. I never imagined that this would become my
calling in life.

I learned a lot sitting and talking with the women of Jobra; I
came to know about things which I had never imagined. I longed to do whatever I
could to help them. With my students, I was able to help the women in a small
way. Acting as the guarantor, I was able to arrange loans from the bank for the
poor people of the village. Alongside the loans, I added a savings program. At
that time, women in the village did not have the capacity to save. The savings
program started with 25 paisa in savings per week. Today the total amount of
savings by the borrowers stands at 6 billion Taka!”

Closer to home, there are some incredible
examples of social entrepreneurs all around the UK. Take a look at one of those
‘Deloitte Social Innovation Pioneers’ I mentioned earlier, for example: Kresse
Wesling has been passionate about waste for many years. When she went on an
environmental auditing course back in 2005 she met members of the London Fire
Brigade, who took her to see a stock of disused fire hoses. “There were coils
and coils of it piled on the rooftop. It was beautiful,” she recalled in an
interview for the Cartier Women’s Initiative Awards, in which she was a
Laureate in 2011.

If you find it difficult to see how old
rubber fire hose can be beautiful, then you should check out Kresse’s website:
elvisandkresse.com. Kresse may be an eco-warrior but she is also a sharp-minded
entrepreneur who saw a problem and at the same time saw a business idea. She has
turned a load of discarded fire hoses destined for landfill into a suite of
high-end fashion products – from beautiful bags to belts and cufflinks. Elvis
& Kresse belts, bags and accessories are sold in the world’s most luxurious
department store, Harrods, alongside famed luxury labels, and have apparently
been spotted on Cameron Diaz in American Vogue. The brand runs in the same
way as any business – except 50% of all profits are donated to charity. Not
only have they built a successful business out of an environmental problem, but
Kresse and her business partner have also decided to make that major shift in
how business is done and what it means to them.

Yes, social entrepreneurs like Kresse have
to be ruthless, especially in the world of high-end fashion and especially when
you have to balance the business and social.

But get that balance right – and
the ruthless business person can be just as ruthless about delivering the
social mission, and be a greater business person and a more authentic human being
because of it.

Tim
West has been writing and consulting in the space where business and social
mission meet for well over a decade. He leads mission-focused PR and marketing
agency Matter&Co; he is founder of Good Deals, the UK’s foremost social investment conference; he created
the RBS SE100 Index of high-growth, high-impact social businesses across the UK
(se100.net); and most recently he launched Pioneers Post , an
online newspaper and learning platform connecting social innovators across the
globe.

Ashoka – biggest network of social innovators
across the globe, with activity in most countries, including a brilliant
programme with Ben&Jerry’s across several countries in Europe, called
Join Our Core

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The NextWomen is a community of Investors, Entrepreneurs & Advisers. We build formats to support the growth of female entrepreneurs -from
startups to companies making millions. We provide access to capital, resources and networks,
offering our community a support infrastructure critical for success. Join the community too! - See more at: http://www.thenextwomen.com/about-us/contributors#sthash.9GODHllB.dpuf

The NextWomen is a community of Investors, Entrepreneurs & Advisers. We build formats to support the growth of female entrepreneurs -from
startups to companies making millions. We provide access to capital, resources and networks,
offering our community a support infrastructure critical for success. Join the community too! - See more at: http://www.thenextwomen.com/membership/sign-up#sthash.0ApND3BW.dpuf

The NextWomen is
a community of Investors, Entrepreneurs & Advisers. We
build formats to support the growth of female entrepreneurs -from startups to
companies making millions. We provide access to capital, resources and
networks, offering our community a support infrastructure critical for success.